Introduction: The Health Awareness Paradox
This time of year, my social media feeds, news outlets, and even my inbox are flooded with reminders about health. From "Dry January" to "Movember," the UK is a nation that embraces health awareness campaigns. We're encouraged to run a bit further, eat a little healthier, and book that check-up we've been putting off. It’s a wonderful and necessary focus.
Yet, there's a paradox at the heart of this movement: while we meticulously plan our physical well-being, we often neglect a crucial component of our holistic health our finances. We understand the importance of a heart screening but fail to see the equal necessity of a financial stress test. What good is a clean bill of physical health if a financial crisis is waiting just around the corner? This month let’s move beyond the purely physical and confront a less comfortable, but equally vital, truth: your financial health is intrinsically linked to your overall well-being.
From Awareness to Action: Why Now is the Time for a Financial Check-Up
This month’s breast cancer awareness campaign serves as a powerful reminder of our vulnerability. They highlight the risks we face the unexpected diagnosis, the sudden illness, the lingering injury and in doing so, they also highlight a crucial financial risk.
- Highlights Inevitable Risks: A campaign about heart health, for instance, is a stark reminder that even the fittest of us are not immune to critical illness. These campaigns are an opportunity to ask ourselves a vital question: "Am I financially prepared if I am the one who gets sick?"
- The Mind-Body-Money Connection: The emotional stress of a health crisis is immense. Add financial stress to the mix the fear of reduced income, the depletion of savings, the guilt of being a burden and it can severely impede your recovery. Taking proactive steps to secure your finances is not just prudent; it's a form of self-care. It allows you to focus on getting better, not on balancing the books.
- Preventing Financial Exclusion: For a business owner, a serious illness can lead to operational paralysis and a loss of income that affects not only their family but their employees. Financial protection ensures that a health problem doesn't become a business problem, protecting livelihoods and the legacy you've built.
"It's an uncomfortable truth, but the first thing to suffer in a health crisis is often not the body, but the mind, weighed down by financial anxiety. A patient’s recovery is profoundly affected by their peace of mind. Taking action on financial protection is one of the most proactive steps you can take for your mental and physical health."
– Keely Woods, Chartered Financial Planner
Your Financial ‘First Aid Kit’: The Essentials of Financial Protection
Just as you pack a first aid kit for a trip, your financial plan needs its own set of essentials to deal with an unexpected crisis.
- Income Protection Insurance: This is your primary defence against the most immediate threat: loss of income. It provides a regular, tax-free income stream if you are unable to work due to illness or injury. For a high-earning individual, this can be a lifesaver, ensuring that your long-term wealth is left untouched and your day-to-day lifestyle is maintained.
- Critical Illness Cover: This provides a one-off, tax-free lump sum upon diagnosis of a serious illness. This money can be used to pay for private medical care, adapt your home, or simply buy you time to focus on recovery. It’s a strategic asset designed to prevent you from selling investments at a loss to fund a health crisis.
- Business Protection: For entrepreneurs and business owners, protecting the company is just as important as protecting yourself. A Relevant Life Policy can be a tax-efficient way for your business to provide life insurance for you. Key Person or Shareholder Protection can also be crucial, providing a financial safety net to ensure the business can continue to operate and survive if a key figure is incapacitated.
- Estate Planning and Powers of Attorney: A comprehensive plan goes beyond insurance. A Lasting Power of Attorney (LPA) ensures your affairs are in trusted hands should you become unable to manage them. Similarly, a well-drafted Will and a clear estate plan protect your legacy and ensure your assets are passed on as you intend, rather than being tangled in legal red tape during a difficult time.
“One thing I often notice is that people assume having wealth means they’re protected from financial setbacks. But even with a high net worth, things like unexpected crises can still affect your business and family. The key difference is that you have the tools and flexibility to plan ahead. Putting a thoughtful strategy in place isn’t just about success it’s what helps turn success into long-term security.”
– Ellie Pemberton, Financial Adviser
Who Needs This Conversation Most?
If any of the following apply to you, then this month's health awareness campaign is your personal wake-up call to action.
- Those with a Disproportionate Reliance on a Single Income: If your family's lifestyle, business, or investment strategy relies heavily on a single income stream, the financial risk is substantial.
- Those with Inefficiently Allocated Capital: You might have significant cash reserves, but is that money truly working for you? Or is it a passive, easily depleted fund that could be better served by a strategic insurance policy?
- Anyone Who Wants to Protect Their Legacy: A health crisis can threaten not just your personal finances but the entire legacy you've worked so hard to build for your family and future generations.
Conclusion: The Smartest Investment is in Yourself
Health awareness campaigns are about more than just your cholesterol levels or your step count. They are a powerful reminder of your fragility and the unpredictability of life. They present a clear choice: will you simply acknowledge the risks, or will you take decisive action to protect yourself and your family?
The smartest investment you can make is in your own well-being and that includes your financial well-being. Don’t wait for a crisis to discover the true value of a robust financial plan. Use this health awareness month as your cue to book a meeting with your financial planner. It's time for a financial check-up, because true peace of mind is the best form of health protection there is. Get in touch if you’d like a comprehensive check up of your financial affairs.
Disclaimer: This article does not constitute financial advice. We recommend that you speak to a qualified financial planner for advice tailored to your individual circumstances and goals. Financial markets may go up or down, and you are not guaranteed a return on your investment. Past performance is not necessarily a guide to future performance.
